I used the start date as January 1, 2005 and the end date as December 31, 2011. I had been saving and investing some before January 1, 2005, but it was more erratic and I was focusing more on paying off student loan debt.

Well, the average return was 1.93%, the Compound Annual Growth Rate (Annualized Return) resulted in a .02% return, when adjusted for inflation.

Is it me, or are these returns depressing. And do they make you question savings and investment and LBYM discipline that you have been following for this long?

I know we invest for the long term, but this has been a seven year period, that seems pretty long to me and I would like to have seen a greater return.

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It's not the first time we've seen flat returns for extended periods of time and likely won't be the last. Using the linked calculator, the ten-year period from January 1, 1972 to December 31, 1981 showed an average return of 0.00 % and annualized return of -2.04 %. It wasn't always better in the "good old days".

I just did the same calc on VFINX from the Yahoo Financial historical data. I may have entered something twice, but I came up with $6.9 increase in NAV over that period and $14.78 in dividends from a starting point on 3 Jan 2005 of $108.90 for a total of +2.63%. Not very exciting.

I have not been using the S&P 500 for a long time as I, too, was disappointed in the S&P 500, after which, Gummy converted me to slice-and-dice, focusing on small cap, value, international and later, dividend producers. I have also formed an aversion to 'growth' companies.

However, things do run in cycles. The word is that companies have been hoarding cash and are waiting to use it. The bigger the company, the more cash. It has not been distributed as dividends to shareholders--yet. It may be about time for them to use it productively.

Perhaps a student of these things can tell us if this makes sense. Is the S&P a sleeping giant?

__________________
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The real answer is to diversify! That was the advice given on CNBC by one of their guests last week.

their advice was to buy some mid cap, small cap, REITS, bonds, emerging markets, etc.........these are just some that I own. If you did the chances are you did far better than just S&P or total stock funds.

No one knows the future.......but you can bet that we'll be surprised so owning different buckets of stocks, bonds and commodities usually will be best for most of us.

I'm not in the financial buisness nor should you consider this advice.......but I have done far better than the S&P with a portfolio that all my friends said was too conservative years ago. I'm lucky, diversification has worked for me.

Is it me, or are these returns depressing. And do they make you question savings and investment and LBYM discipline that you have been following for this long?

I know we invest for the long term, but this has been a seven year period, that seems pretty long to me and I would like to have seen a greater return.

You're not planning on having your entire investment portfolio invested in equity funds are you?

My rather general understanding of these matters is that when equities go down, bonds tend to go up, so holding a portion of your portfolio in bonds or bond funds would probably give you a slightly higher return during these "low" periods - as well as reducing the volatility of your portfolio enough so that you can stomach the lean times.

There are other asset classes too. Quite a few forum members own rental real estate.

__________________ER, for all intents and purposes. Part-time income <5% of annual expenditure.

I think one reason companies hoard so much cash these days is because it protects them from the sudden type of credit crisis we saw in 2008. But maybe they will start returning a bit more to shareholders.

I just checked to see the compound annual growth rate of the S&P 500 for the period that I have been actively investing in, in an effort to retire early.
Is it me, or are these returns depressing. And do they make you question savings and investment and LBYM discipline that you have been following for this long?
I know we invest for the long term, but this has been a seven year period, that seems pretty long to me and I would like to have seen a greater return.

I guess it's an interesting academic exercise, but seven years is not very long and I don't know anyone who invests solely in the S&P500.

When I was getting started in 1979, stocks were dead and the smart investors were in gold bullion or gem diamonds. I'm glad I didn't follow that advice.

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I don't spend much time here anymore, so please send me a PM. Thanks.

If this is just a depression question - Is it depressing that money I invested in 2000 is now worth about .89 cents for every dollar (computed from Jan 1 2001)? Well, yea, that's depressing. I would rather not have computed that datum.

I'm learning that these "sideways" markets take active management to make a profit. Timing a market though is tough.

For every active manager believing he's making a smart "buy" there's an active manger who believes he's making a smart "sell."

In a sideways market, when returns are low, people become more fully aware of the costs they pay for active management. And that's when they discover how some people--the folks they pay for their advice--can advertise that they "can make money in the market no matter which way it goes." So true! That 1-2% on assets managed rolls in like clockwork.

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